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Finance & accounting automation is not straightforward. So what can you do about it?

24th Nov 2022
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Aurelia are the automation and software experts for accountants and finance leads. We want to to...
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While other industries seem to thrive when you mix technology in, accounting tech and finance automation in general seems to be lagging behind, why is that?

And, if there are a few established automation tools in the market, why are so many accountants and bookkeepers still using Excel and Google Spreadsheets?

Accounting automation is not straightfoward | Aurelia on AccountingWeb
Cottonbro / Pexels

The existing state of automation for the finance department

If you work with a very simple use cases, your clients operate a single store on a platform like Shopify (sorry WooCommerce users), in a single country, with a single currency, you use Quickbooks (sorry Xero users), then you may be able to stop reading here, from what we’ve seen, your needs may be covered.

However, if you have any other mix, like running multiple stores across multiple countries, dealing with multiple currencies, wanting each sale accounted for individually, having multiple payment processors, then you may be experiencing some discomfort when it comes to doing the month-end work. Or worse, when your clients ask a question “What are our margins, really?” you'll be left feeling like walking with a rock in your sock.

With so many scenarios that go wrong or are simply not covered by classic point-to-point software integrations, no wonder so many people still resort to Excel as their preferred tool.

Why is it like this?

Our hearts ache when we speak with yet another accountant or frustrated CFO who tells us the same story. It always starts off with something they’re trying to do and ends with “if only my tools could talk to each other”. The only thing that I can’t describe here is the look of frustration mixed in with some doubt, as if there’s a spark at the back of their minds, an itch that can’t be scratched asking if there is a better way. “You’d think we would’ve solved this by now, right?”

But let’s take a pragmatic look at it, there’s a lot of things to get wrong and often times the companies building these integrations don’t know any better. It’s hard to build something that is high quality enough for accountants if you don’t understand how purchasing works, how balancing a journal entry is supposed to look like or what actually happens when you need to submit your VAT reports!

Let’s take a look at some of the most common sore spots we’ve noticed:

Example 1: Currencies

Accounting Automation is not straightforward. Aurelia on AccountingWeb

The reality is that this is an area poorly understood and appreciated by a lot of products. We’ve seen ourselves a lot of issues across multiple countries, whether it’s going from pounds to euros or euros to dollars, even accounting tools themselves sometimes struggle with this.

This may be very dry but if anyone is looking to learn something new, here’s one of the most interesting guides on multiple currency accounting.

Example 2: VAT Mapping

Often overlooked, but once again, if you’re not familiar with how VAT reporting happens and what work it typically entails, it’s easy to build a wonky chair. Even some popular tools, which we previously mentioned in a good light struggle with this one. All of that just to start to breakdown sales by countries. Now imagine Amazon changes one of their rules about which countries they collect and remit VAT and you’ll be needing a few coffees to remember how it all works and where things break. And worse, because this wasn’t built with the process in mind, you’re likely to find out once you’ve already started preparing the next report already!

Example 3: Way too rigid and unreliable

Accounting Automation is not straightforward. Aurelia on AccountingWeb

Accounting Automation is not straightforward. Aurelia on AccountingWeb

Rigid systems don’t fare well under real world conditions. When tools that are too rigid tend to fail, unfortunately they don’t fail like a human would, instead of it being like writing the wrong letter in a word, software products fail more like spilling a bottle of ink over the entire page.

What’s worse, you don’t know when to expect it. It may be working just fine today and tomorrow suddenly it takes forever for a page to load or worse, it fails and you don’t even know about it until it’s too late. We’ve seen a few brave accountants that tried to automate their work with Zapier for example, and started complaining that nearly 20% of the zaps were failing.

We don’t mean to put you in a crippling anxiety by sharing these examples here but only to say, from what we’ve seen, lots can go wrong when products for accountants and the finance department in general aren’t built with accounting standards in mind. Some of these rough edges, if you’ve been around for a while you know to prepare for, others can be a constant pain.

What you can do about it?

First off, keep rating and sharing your thoughts on where these tools fall short. We have nothing but words of gratitude for those that have already shared their thoughts with us and we’ve been humbled a bunch of times in realising how our own understanding needed improving, so keep sharing, don’t hold back, you can and should demand better quality from the tools you have, the bar is currently set very low compared to other industries.

Similarly, to help the people building the tools that you use day to day, there isn’t a lot of good quality material out there. We’d encourage you to write and share your thoughts on where you think the software engineers are misunderstanding concepts that are fundamental to how you do your job.

What is Aurelia doing about it?

Contrary to what others have tried, we believe a true change can only happen if we leverage the medium itself to the maximum.

What do we mean by this? Well, we think simply taking the same old processes that were based on pen and paper and now dropping them in a table on your screen instead won’t cut it. There’s a lot more that computers can do but only if you design the processes with things like the internet in mind, from day 0.

To put it shortly, we believe you can combine high quality software with building with accountants, and that if we get it right we allow accountants and bookkeepers to be seen as a partner to the business and spend their time where their skills are most useful.

Send us your stories

Whether it helps you release some shoulder tension or if you just want to vent, anonymised or not, send us your stories about when you felt software automation was unnecessarily difficult at [email protected]